The apparent agreement that the five institutional bodies are formulating with Aaron Frankelfor the sale of shares Shufersal which they hold in his hands, is expected to include two special clauses. One clause that states that if Frankel sells the share of Shufersal shares that he will buy to another large entity, the entities will share with him the profits that will be generated for him. The second section is more specific to the case where Frankel will actually buy more shares, most likely from a Migdal company that is not a partner in the emerging agreement. If Frankel buys shares at a higher price, here too a special mechanism will come into effect that will compensate the institutions for the higher price at which the shares will be purchased.
● The billionaire who wants to take over Shufersal network reveals the plans interview
● Real estate, drones and now also satellites: Frankel’s acquisition spree has reached space
● The fight ends with a deal: Frankel will sell his holding in Gev Yam to Properties and Building
Six institutional bodies currently own about 60% of Persal. Five of them (Altschuler Shachem, Harel, Fenix, Menorah and Kelal Insurance) are negotiating with Aharon Frankel for the sale of about a fifth of their holdings. The Migdal company is not a party to the ongoing negotiations and is not interested in selling the shares, because it estimates that the price offered in the transaction (NIS 25 per share) is too low.
Shufersal’s share rose by more than 10% in the last two weeks and is currently trading at around NIS 24, not far from the price at which the transaction with Frankel is supposed to take place. If the sale goes through, Frankel will initially hold about 10% of Persal and will have an option to further increase his holding to an extent that is not yet fully known, possibly up to 15% and even beyond that.
An attempt to dissuade Frankel from quickly realizing possessions
The goal of the institutions is for Aharon Frankel to enter and become a dominant shareholder in Shufersel. The introduction of the clauses that will require him to share the profits if he decides to quickly realize his holdings and reap a quick profit, is actually intended to try to discourage and keep him in Shufersal for a long period of time. The institutions are actually interested in selling some of their shares to Frankel, with the goal that he will stay for a long time and support the improvement plans, especially the real estate that Shufersel wants to promote.
All this against the background of shuffling in the stock, which has retreated by 7% in the past year, and is suffering from weakness due to the increased competition in the retail sector alongside a jump in the costs of employee wages and food prices.
An institutional source who spoke with Globes said that the institutions want to support the chairman who was elected a little over two months ago, Itzik Abarkhan, after a number of strong upheavals in the company’s management this year. “We want to give a counter to Abarkhan. We have seen that almost all companies without a core of control in the stock market simply do not perform too well. I think this is a move designed to strike a certain balance.”
According to the same source, “It is true that the Mossadians supported Abarkhan, but it was more in the light of the lesser evil. We said: There is someone here who knows the company, it is better to take him. But we see that, despite this, things are not working there as they should be, and it seems to us that if there is a controlling Hands On balances things out, it will be good for the company.”